2. Upon the disposal of the property as contemplated by
s 57(1) of the Act the curator bonis shall pay to the respondent
one half of the net proceeds of the property. The said proceeds shall
be the separate property of the second respondent and excluded from
the joint estate of the respondents.

[1] On 2 November 2005 the respondent obtained a
preservation order in terms of s 38(2) of the Prevention of Organised
Crime Act,
121 of 1998 (POCA)1
from the KwaZulu-Natal High Court, Durban, in respect of a farm known
as portion 11 (of 4) of the farm Spitskop 92, registration
HT,
province of KwaZulu-Natal (‘the farm’) and a Venter trailer
bearing registration letters and numbers RCY 126 GP (‘the
trailer’). The farm is jointly owned by the two appellants who are
married in community of property.

[2] On 14 December 2007, Nicholson J granted a
forfeiture order in terms of s 50(1)(a) of POCA2
in respect of the farm on the basis that the farm was an
instrumentality of an offence, namely the unlawful manufacture of
drugs.
The appellants are appealing against that order with the leave
of the court a quo.3

The facts

Respondent’s version

[3] As the facts of this case are to
a large extent common cause, I will only refer to the most salient
facts which serve to elucidate
this judgment. On 22 June 2004
Inspector Van Heerden of the South African Police Service (SAPS)
discovered a huge amount of methaqualone
at the farm. In addition, he
found an assortment of equipment which included some pots, gas
cylinders, heaters, rakes, laboratory
equipment, gloves and masks. In
addition some anthrillic acid, o-toluidine and some finished product
of methaqualone were also
found at the farm. Inspector Moripe, a
forensic analyst attached to the Chemistry Unit, State Forensic
Laboratory asserted that
all these are used in the manufacture or
synthesis of methaqualone. Furthermore, according to Moripe,
methaqualone is listed in
Part III of Schedule 2, o-toluidine in Part
I of Schedule 1 and anthrillic acid in Part I of Schedule 1 of the
Drugs and Drug Trafficking
Act 140 of 1992. Both anthrallic acid and
o-toluidine are essential in the manufacture of methaqualone.

Appellant’s
version

[4] The first appellant
denied that he knew or had any reasonable grounds to suspect that
such illegal activities were carried on at the farm. He asserted
that
he purchased the farm lawfully (which fact was not disputed by the
respondent) and further that he purchased it to conduct
some lawful
farming operations (which fact was disputed by the respondent).

[5] The first appellant stated
further that he had sub-let the farm to one Thanyani Justice Makhunga
for the grazing of his cattle
and the manufacture of fertilizer. It
is common cause that Makhunga never brought his cattle to the farm,
nor did he commence to
manufacture fertilizer. The first appellant
stated that he stayed some 70km away from this farm with his family.
He only visited
the farm once in a month or once in two months. The
last time he had visited the farm before the drugs were discovered
was at the
end of May 2004.

[6] The
second appellant did not testify in opposition to the application for
the forfeiture as the respondent had conceded that they
had no
evidence to prove either that she had knowledge or reasonable grounds
to suspect that the farm was used as an instrumentality
of an
offence. In essence both the first and second appellant relied on the
‘innocent owner’ defence as contemplated by s 52(2A)(a)
of
POCA.4

[7] I interpose to state that on appeal two crucial
concessions were made on behalf of the two appellants. First, that
the farm
was in fact used as an instrumentality of an offence, and
secondly, that the requirement of proportionality was in respondent’s
favour. What remained therefore was for the appellants to prove, on a
balance of probabilities, that they neither knew nor had
reasonable
grounds to suspect that the farm was used as an instrumentality of an
offence in terms of s 52(2A) of POCA.

Judgment of the court a quo

[8] After analysing the evidence, the learned judge
found the first appellant’s version to be grossly improbable. He
found that
the illegal activities which were carried out at the farm
were of such a nature and magnitude that, if the first appellant had
acted like a reasonably diligent and vigilant owner, he would have
known of their existence and, unless he was a party thereto,
would
have stopped them. Furthermore, the learned judge made adverse
credibility findings against the first appellant. In fact
he found
that the first appellant ‘told a most improbable story badly’.
Based on this reasoning, the learned judge concluded
that the first
appellant knew of the unlawful manufacture of drugs at the farm.

[9] It is clear from the judgment of the court belowthat the second appellant’s position gave
the learned judge serious problems, mainly because it was conceded by
the respondent
that she was an ‘innocent owner’. However, what
made the problem rather intractable was that, by virtue of her
marriage in
community of property to the first appellant, she had no
interest which could be separated from the joint estate. This is
because
her interest in the farm formed an undivided and indivisible
part of their joint estate which, the learned judge correctly
described
as a species of what is known as ‘tied ownership’.
Based on the finding that it was legally impossible if not
impracticable
to excise her interest from the joint estate, innocent
though she is, the learned judge declared the proceeds of the farm
forfeit
to the state.

Appellant’s submissions

[10] At the
hearing of the appeal, Mr Engelbrecht SC appearing for both
appellants raised two crisp issues for argument. The first issue
was
whether the court belowwas correct in its
credibility findings against the first appellant. The second was
whether the court belowwas correct in
declaring the second appellant’s undivided and vested interest in
the farm forfeit to the state.

[11] Regarding
the first issue, Mr Engelbrecht submitted that the court belowerred in finding
that the first appellant knew of the illegal activities at the farm
as the evidence is clear that he did not visit
his farm regularly and
further that no evidence was led that, at the time when he had
visited the farm, the substances and equipment
found by Van Heerden
and his colleagues, were present on the farm. He described this as a
big lacuna in the respondent’s case.

[12] However, when it was pointed out
to him that it had been conceded on behalf of the two applicants at
the hearing of the application
that the farm was used as an
instrumentality of an offence and further that proportionality was in
the respondent’s favour, Mr
Engelbrecht capitulated. Quite
importantly, Mr Engelbrecht further conceded that, based on R
v Dhlumayo 1948 (2)
SA 677 (A), he could not argue against the adverse credibility
findings made by the court belowagainst the first
appellant. No further submissions were made on behalf of the first
appellant.

[13] Concerning the second appellant’s case, Mr
Engelbrecht argued that, because the respondent admitted that she had
no knowledge
of the illegal activities which took place at the farm
which made her an ‘innocent owner’, it was unfair to declare her
interest
in the farm forfeit to the state. He argued further that the
court belowerred in
finding as a basis for its decision, that it could not make an order
excluding the second appellant’s interest in the
property from the
forfeiture order as it would be impossible to give effect to such an
order. In conclusion, he submitted that
as a court considering
possible forfeiture of property has a discretion in terms of s 52(1)
to exclude certain interests from forfeiture,
Nicholson J should have
exercised his discretion in favour of the second appellant as she is
an innocent owner.

Respondent’s submissions

[14] Mr Govindasamy SC, appearing for
the respondent together with Ms Naidoo and Mr Molelle, argued firstly
that the evidence against
the first appellant was overwhelming and further that the judgment of
the court belowwas
unassailable.

[15] Concerning the issue of the second appellant’s
interest in the farm, he submitted that it was not feasible that her
interest
in the farm could be exempted from the order of forfeiture.
He based this submission on the fact that the appellants are married
to each other in community of property in terms whereof they are both
joint owners of the farm. As a result, she merely holds an
undivided
and indivisible interest in the farm. In developing his argument
further, Mr Govindasamy submitted that allowing her
to retain a half
share of the property would actually defeat the purpose of POCA, as
the first appellant, would, by virtue of the
marriage in community of
property, be automatically entitled to a half-share in her share of
the farm. This, so he submitted, would
be tantamount to allowing the
first appellant to enjoy the proceeds of his illegal activities which
is inimical to the spirit and
purpose of POCA. To avoid this
situation, Mr Govindasamy argued that the second appellant’s remedy
lies in her right to claim
against the joint estate in the event
where she can prove that she suffered some loss as a result of the
first appellant’s unlawful
conduct.

Discussion

[16] It is common cause that the criminal operations
that were going on at the farm were extensive. That this was a
factory for
the manufacture of drugs admits of no doubt. Quite
importantly even the first appellant was unable to dispute this fact.
It follows
in my view, that if indeed the first appellant did not
have actual knowledge of these operations as he claimed, it is
because he
did not act like a reasonably diligent and vigilant
property owner as envisaged by s 1(3)(a) and (b) of POCA.5

[17] The first appellant cannot
abdicate responsibility over his farm. Given the magnitude of the
illegal activities at the farm, there is
no way in which the first
appellant could not realistically have become aware of what was
happening on the farm. The activities
on the farm were carried out
brazenly and without any attempt to hide them. The conclusion that
the first appellant was either
complicit in these illegal activities
or that he deliberately turned a blind eye to them is justified.

[18] As the
owners of the property, the appellants had the responsibility to
ensure that the farm was not used for unlawful purposes.
The first
appellant explained that he had sub-let the farm to Makhunga.
However, on his own version, he showed no interest in supervising
the
farm. Worse still he showed no interest in what Makhunga was doing at
the farm. It makes perfect sense that where a property
owner allows
his or her property to be used to conduct criminal activities, the
law should take its course. As this Court observed
in NDPP
v R O Cook Properties (Pty) Ltd, NDPP v 37 Gillespie Street Durban
(Pty) Ltd; NDPP v Seevnarayan6at para [28].

‘. . . We
agree that property owners cannot be supine. In particular, we
endorse the notion that the State is constitutionally permitted
to
use forfeiture, in addition to the criminal
law, to induce members of the public to act vigilantly in relation to
goods they own or
possess so as to inhibit crime. In a constitutional
State law-abiding property-owners and possessors must, where
reasonably possible,
take steps to discourage criminal conduct and to
refrain from implicating themselves or their possessions in its
ambit. And the
State is entitled to use criminal sanctions and civil
forfeitures to encourage this. Here constitutional principle
recognises individual
moral agency and encourages citizens to embrace
the responsibilities that flow from it.’

I am in respectful agreement with this dictum.

[19] The appellants having conceded
the two cardinal issues of instrumentality of an offence and
proportionality, coupled with the exposition set out above, I am of
the view that the order of forfeiture against the first appellant by
the court belowis
correct.

[20] I now turn to deal with the
second appellant’s case. I must confess that I find the position of
the second appellant rather complex
and highly controversial. There
are two aspects which compound her position. Firstly it is because
the respondent had accepted
that she had no knowledge of the illegal
activities which were conducted at the farm. Undoubtedly she is an
innocent owner. However
what compounded the problem further is the
fact that the farm in issue formed part of the joint estate between
the appellants and
that it was therefore, impracticable to divide and
exclude her interest from forfeiture.

[21] In terms of s 52(1) of POCA7
a court before which an application for forfeiture is made has a
discretion whether to grant the order or not. If an applicant
satisfies the requirements set out in s 52(2A), the court may exclude
his or her interest in the property from being declared forfeit
to
the State. In terms of the section such an applicant has to prove
that he or she acquired the property lawfully and further
that he or
she did not know or did not have reasonable grounds to suspect that
the property was used as an instrumentality of an
offence referred to
in Schedule 1. As the respondent had accepted that the second
appellant is an ‘innocent owner’ I am of
the view that the
forfeiture of her interest brings the constitutionality of such an
order to the fore.

[22] It is
generally acknowledged that the effects of forfeiture are draconian
and potentially invasive of the rights of people to their
properties.
There is an ever-present threat of a serious conflict between the
right to property as provided for in s 25(1) of the
Constitution and
an order for the forfeiture of property under s 50(1) of POCA which
can result in far-reaching consequences if
not managed with care. I
agree with Nkabinde J in Prophet
v National Director of Public Prosecutions8where she expressed
the following caution:

‘While the purpose and object
of Ch 6 must be considered when a forfeiture order is sought, one
should be mindful of the fact that unrestrained application
of Ch 6
may violate constitutional rights, in particular the protection
against arbitrary deprivation of property particularly
within the
meaning of s 25(1) of the Constitution, which requires that “no law
may permit arbitrary deprivation of property”.
In FirstNational Bank of SA Ltd t/a Wesbank v
Commissioner, South African Revenue Service and Another; First
National Bank of SA Ltd t/a
Wesbank v Minister of Finance (“FNB”)9
this Court held that “arbitrary” in s 25(1) means that the law
allowing for the deprivation does not provide sufficient reason
for
the deprivation or allows deprivation that is procedurally unfair.
The Court said:

“(F)or the validity of such
deprivation, there must be an appropriate relationship between means
and ends, between the sacrifice
the individual is asked to make and
the public purpose this is intended to serve. It is one that is not
limited to an enquiry into
mere rationality, but is less strict than
a full and exacting proportionality examination.”’

In my view, the second appellant’s position required
such care and circumspection in maintaining a judicious balance
between the
purpose of POCA and the rights of the second appellant
who is an ‘innocent owner’. With respect it seems to me that the
learned
judge failed to strike such a balance.

[23] Given the
fact that the second appellant is innocent of any wrongdoing, the
forfeiture of her interest in the farm, in my view,
raises a number
of critical constitutional questions, i.e. how would forfeiture of
her interest advance the main purposes of POCA?
What public interest
would the forfeiture of her interest in the farm serve? How is the
forfeiture of her interest in the farm
rationally connected to the
purpose to be attained by POCA? What justification is there for
depriving her of her interest in the
farm? It seems that these issues
were not properly considered by the court below. Clearly the
deprivation of her interest in the
farm is constitutionally
indefensible and therefore arbitrary as there is no sufficient reason
for the deprivation as stated in
First
National Bank v Minister of Finance
at para 100 where Ackerman J set out the criteria for sufficient
reason to be as follows:

‘(a) It
is to be determined by evaluating the relationship between means
employed, namely the deprivation in question and ends sought
to be
achieved, namely the purpose of the law in question.

(b)A
complexity of relationships has to be considered.

(c)In
evaluating the deprivation in question, regard must be had to the
relationship between the purpose for the deprivation and the
person
whose property is affected.

(d)In
addition, regard must be had to the relationship between the purpose
of the deprivation and the nature of the property as well
as the
extent of the deprivation in respect of such property.

(e)Generally
speaking, where the property in question is ownership of land or a
corporeal moveable, a more compelling purpose will
have to be
established in order for the depriving law to constitute sufficient
reason for the deprivation than in the case when
the property is
something different and the property right something less extensive.
This judgment is not concerned at all with
incorporeal property.

(f)Generally
speaking, when the deprivation in question embraces all the incidents
of ownership, the purpose for the deprivation will
have to be more
compelling than when the deprivation embraces only some incidents of
ownership and those incidents only partially.

(g)Depending
on such interplay between variable means and ends, the nature of the
property in question and the extent of its deprivation,
there may be
circumstances when sufficient reason is established by, in effect, no
more than a mere rational relationship between
means and ends; in
others this might only be established by a proportionality evaluation
closer to that required by s 36(1) of
the Constitution.

(h) Whether there is
sufficient reason to warrant the deprivation is a matter to be
decided on all the relevant facts of each particular
case, always
bearing in mind that the enquiry is concerned with “arbitrary” in
relation to the deprivation of property under
s 25.’

Regrettably, I find that the deprivation of the second
appellant’s interest in the farm does not pass the test enunciated
in First National Bank.

[24] It is trite
that the right to property is a fundamental right deeply ensconced in
the Bill of Rights. Section 25(1) of the Constitution10
prohibits, in clear terms, any arbitrary deprivation of property. On
the other hand s 7(2) of the Constitution11
obliges the state to respect, protect, promote and fulfil the rights
in the Bill of Rights. In addition s 39(1) of the Constitution
requires our courts, when interpreting the Bill of Rights, to promote
the values that underlie an open and democratic society based
on
human dignity, equality and freedom. Undoubtedly this places a duty
on every court which has to consider possible forfeiture
of property
to be careful not to make orders which may exceed the proper and
legitimate objectives striven for by POCA. A failure
to do so may
result in orders which may be unduly invasive of the rights of
innocent owners and which may amount to an abuse which
is not
constitutionally defensible. This salutary approach was enunciated as
follows in NDPP v R
O Cook Properties
in para 29:

‘We therefore agree that the Act requires property owners to
exercise responsibility for their property and to account for their
stewardship of it in relation to its possible criminal utilisation.
But the pursuit of those statutory objectives cannot exceed
what is
constitutionally permissible. Forfeitures that do not rationally
advance the inter-related purposes of ch 6 are unconstitutional.
Deprivations going beyond those
that remove incentives, deter the use
of property in crime, eliminate or incapacitate the means by which
crime may be committed
and at the same time advance the ends of
justice are, in our view, not contemplated by or permitted under the
Act.’ (My emphasis.)

[25] I have no doubt that, based on
the admitted fact that the second appellant is an ‘innocent owner’,
who has committed no wrong,
whether intentional or negligent, the
forfeiture order in so far as it affects her does not pass
constitutional muster. It offends
society’s notions of what is fair
and just. What is worse it goes beyond the core purpose of POCA. It
is clear from the judgment of the court belowthat the learned judge
was mindful of the fact that the forfeiture of the whole farm might
be offensive to the constitutional values
of equality and dignity and
quite importantly might also breach a fundamental principle of our
criminal law that the innocent should
not be punished. This
notwithstanding, the learned judge proceeded to declare the proceeds
of the farm, including the second appellant’s
interest, forfeit to
the state. It appears to me that to deprive second appellant of her
interest constitutes a breach of the constitutional
principle of
equality. (See Mohunram and Another v National
Director of Public Prosecutions (Law Review
Project as Amicus Curiae).12

[26] In declining to exclude the second appellant’s
interest in the farm from forfeiture, the learned judge in the court
belowwas of the view
that it would deprive the respondent of its redress as stipulated in
the statute or common law. To my mind, the
learned judge misconstrued
the real and main purpose underpinning POCA. The primary purpose of
POCA is to prevent organised crime.
In cases where property is used
as an instrumentality of an offence, this can be achieved by having
such property declared forfeit
to the State. The intention
underpinning such forfeiture is not necessarily to punish the
offender, but to deprive him or her of
the instrument used to
facilitate or commit the offence. Such a forfeiture is intended
mainly to cripple or paralyse the illegal
activities which are
carried on. Once this has happened, the objects of POCA will have
been satisfied.

[27] However, the pertinent question now remains: once
the property is declared forfeit to the state, what is its ultimate
fate?
As POCA was never intended to enrich the state, it follows that
the state cannot own the farm. The state through the curator bonisis obliged by s 57(1)(c) of POCA to ‘dispose
of property forfeited under s 56(2) by sale or any other means and
deposit the proceeds
of the sale or disposition into the Account.’
Once the farm has been sold by the curator bonis, nothing prevents
himfrom paying to the
second appellant her half share from such proceeds once all
legitimate claims against the farm have been settled.
This is because
the forfeiture is aimed at the instrumentality and not the proceeds.
Self-evidently such proceeds can never be
equated with an
instrumentality of an offence.

[28] Given the peculiar circumstances of this case I do
not agree that the order sought by the second appellant is a legal
impossibility
as the respondent’s counsel submitted. What the court
belowshould have done
was to grant the order of forfeiture of the farm subject to the
second appellant’s entitlement to a half share
of the proceeds upon
sale of the farm. To my mind this is legally permissible because the
forfeiture order is primarily against
the farm as an instrumentality
of an offence and not the proceeds from the sale of the farm.
Undoubtedly such an order would have
struck the delicate balance
between the second appellant’s interest and the main purposes of
POCA.

[29] Although there is not much judicial authority for
the above proposition, there is some considerable
support from some academic writers that even during the existence of
the marriage in community of property,
parties can be allowed to keep
separate property which does not form part of the joint estate eg
donations between spouses, gifts
and bequests made to one spouse with
the express condition that such be excluded from the joint estate;
damages for non-patrimonial
loss resulting from delict committed by a
third party or one spouse against the other; instances where one
spouse has despoiled
the other spouse of a thing over which such
spouse had peaceful and undisturbed possession, property excluded by
ante nuptial-contract,
and certain life insurance policies effected
by the husband in favour of his wife or ceded by him to her, or
effected by the wife
on her own life or that of her husband, as also
the proceeds of such policies.13

[30] More
importantly, the Matrimonial Property Act 88 of 1984 makes provision
for separate property to be owned separately by one spouse
to the
exclusion of the other.14
That the Matrimonial Property Act has ushered in drastic changes
regarding the inviolability of the joint estate was acknowledged
by
Moseneke DCJ in Van
der Merwe v Road Accident Fund (Women’s Legal Centre Trust as
Amicus Curiae)15
where he stated the following at para 30:

‘.
. . On 1 November 1984, chs 2 and 3 of the Act jettisoned much of the
gender differentiation found in the common law of marriage
in
community of property. The legislation made drastic inroads into the
theoretical unity and inviolability of the joint estate
and recast
the common law of marriage irreversibly . . .’.

It should be clear from the above exposition that the
learned judge could have made an order that the second appellant’s
share
of the proceeds after the sale of the farm be paid to her to
form her separate property. To my mind, this would have ensured that
the forfeiture order does not go beyond the legitimate limits of the
objects of POCA. Quite importantly such an order would not
compromise
the main objects of POCA.

[31] Based on the exposition set out above, I am of the
view that there is no legal impediment to making an order that the
second
appellant be paid her half share of the proceeds after the
sale of the farm as a failure to do so would inevitably result in
punishing
the innocent party. In order to avoid her half share
falling back into the joint estate in respect whereof the first
appellant
remains a joint owner, her half share of the nett proceeds
from the sale of the farm will have to be paid into her separate
account
thus making it her separate property. To my mind, this will
ensure that the second appellant who is an innocent owner is not
unduly
punished by a deprivation of her interest where there is no
legal or rational justification.

[32] There is a further comment I
wish to make about the order of the court below. Instead of making an
order for the forfeiture of the
property in terms of s 50(1) of POCA,
Nicholson J made an order ‘declaring forfeit to the State the
proceeds of the property
. . .’. It is clear that this order is
erroneous and was made per incuriam.
Chapter 6 of POCA which is the one relevant to these proceedings is
headed ‘Civil Recovery of Property’. Moreover, all the
relevant
sections ie ss 38 to 60 under Chapter 6 refer to property or interest
in property and not the proceeds of the property.
It follows that the
order by the learned judge has to be corrected.

[33] I now have to deal with the question of costs. The
fact that the first appellant has failed whilst the second appellant
succeeded
in the appeal makes it difficult to apportion the costs of
the appeal. However it does not appear to me to be fair and just to
mulct the first appellant with all the costs of appeal, particularly
as he has already had to pay the costs of the application to
exclude
his interest from forfeiture (albeit that such costs are to be paid
from the joint estate). To my mind fairness and justice
require that
each party should bear its own costs.

[34] In the
circumstances, I would make the following order:

1. The appeal by the first appellant
is dismissed.

2. The
appeal by the second appellant succeeds to the extent that the order
by the court belowis varied to read
as follows:

2.1 An
order is hereby granted in terms of s 50(1) of the Prevention of
Organised Crime Act 121 of 1998 (‘the Act’) declaring forfeit
to
the State the whole of the farm belonging to the first and second
appellants described as:

(a) The
curator bonisappointed in terms
of the preservation order made on 2 November 2005 shall continue to
act in such capacity.

(b) The curator bonis
shall, as at the date on which the forfeiture order shall take
effect, be empowered to perform the following functions:

(i) to dispose of the property by
sale or other means;

(ii) to
settle all legitimate claims against the property, including the
balance, if any, on the mortgage bond registered over the immovable
property in favour of one Anthony Perreira Jones and Susara Johanna
Elizabeth Jones held under bond No 17313/03;

(iii) to
pay one half of the balance of the nett proceeds of the farm to the
second appellant. The said proceeds shall constitute the
second
appellant’s separate property which shall be excluded from the
parties’ joint estate;

(iv) to
pay the balance of the proceeds into the Criminal Asset Recovery
Account.

3. The
Registrar of the KwaZulu Natal High Court, Durban is directed to
publish a notice of this order in the Government Gazette
as soon as
possible.

4. Each party is to pay its own
costs.

________________________

L
O BOSIELO

ACTING
JUDGE OF APPEAL

NUGENT JA (MTHIYANE, CACHALIA and HURT AJA CONCURRING)

[35] I do not think the judgment of my colleague Bosielo
AJA adequately addresses what I consider to be the central difficulty
that
presents itself in this case and I am also not in full agreement
with the order that he proposes. For those reasons I set out briefly
the reasons that found my conclusion.

[36] The National Director of Public Prosecutions (NDPP)
applied to the court below under s 48 of the Prevention of
Organised
Crime Act 121 of 1998 (POCA) for an order forfeiting to the
state portion 11 of the farm Spitskop 92 (I will refer to it as the
farm). The farm was owned by the appellants, who are married in
community of property.

[37] Section 50(1) authorised that court, ‘subject to
section 52’, to make a forfeiture order if it found, as a matter of
probability,
that the farm was an ‘instrumentality’ of an offence
referred to in Schedule 1. In this case it was not disputed that the
farm was an instrumentality of the offence of manufacturing drugs in
contravention of s 3 of the Drugs and Drug Trafficking Act
140 of
1992 (a Schedule 1 offence). It was also not in dispute that a
forfeiture order would (in ordinary circumstances) be proportionate
to the purposes of the statute and thus constitutionally
permissible.16
The court accordingly granted a forfeiture order.

[38] There is an observation that I need to make
concerning the form of the order before I turn to the issues that
arise in this
appeal. The court below (Nicholson J) declared forfeit
to the state ‘the proceeds’ of the farm and not the farm itself.
(Further
orders authorised the curator bonis to dispose of the farm;
deduct his fees and expenses; pay the balance outstanding on a
mortgage
bond; and pay the proceeds into the Criminal Asset Recovery
Account.17)
A forfeiture order in those terms was not strictly correct. The
‘instrumentality’ of the offence that was liable to forfeiture
was the farm. If a forfeiture order was to be made it ought to have
ordered forfeiture of the farm and not its proceeds (which
were not
the instrumentality of the offence). Once such an order is made then
by operation of law the farm vests in the curator
bonis on behalf of
the state,18
who is required to dispose of the property, and to deposit the
proceeds to the Account.19
(I think it is implicit that the moneys so deposited accrue to the
state.) To that extent the order of forfeiture falls to be corrected.

[39] Apart from the terms in which the order was
granted, as I mentioned above, Nicholson J cannot be faulted for
granting a forfeiture
order and the appeal is not directed to his
order in that respect. The appeal is confined to his order to exclude
from the order
the appellants’ interests in the property. (Needless
to say, the effect of such an order would have been to nullify the
forfeiture.)

[40] Section 52 of POCA provides what has loosely been
called an ‘innocent owner’ defence to a person whose interests
are affected
by a forfeiture order (though that is a misnomer
because, as pointed out in Cook Properties,
‘innocence [of the offence] is not enough’).20
That section permits a court to exclude ‘from the operation of [a
forfeiture order]’ what are called ‘certain interests’
in the
property concerned, if it is shown by the applicant for such an
exclusion that the interest was legally acquired, and that
he or she
‘neither knew nor had reasonable grounds to suspect’ that the
property in which the interest is held is an instrumentality
of the
offence.21

[41] Both appellants applied for orders excluding from
the operation of the forfeiture order such interests as they each had
in
the farm. The court below heard oral evidence on the question
whether the appellants either knew or had reasonable grounds to
suspect
that the farm was an instrumentality of the offence.

[42] It found that Mr Mazibuko must have been aware that
the farm was being used for the manufacture of drugs. On that basis
Mr
Mazibuko did not fall within the terms of the section and the
court below declined to exclude his interest. The appeal by Mr
Mazibuko
was confined to challenging that factual finding. I do not
think it is necessary to repeat the evidence that was before the
learned
judge on that issue, some of which appears from the judgment
of my colleague. It is sufficient to say that there was ample
evidence
to support that finding and the appeal by Mr Mazibuko must
fail.

[43] The position with regard to Mrs Mazibuko is
different and it is to that issue that most of the argument in this
appeal was
directed. It is not in dispute that Mrs Mazibuko was
neither aware, nor had grounds to suspect, that the property was an
instrumentality
of an offence and that she fell within the provisions
of the section. The court thus had a discretion to order the
exclusion of
her interest. There can be no question that she would
have ordinarily been entitled to such an order, because there were
simply
no grounds for refusing it. The effect of a refusal would have
been to deprive her of property arbitrarily in conflict with s 25(1)
of the Bill of Rights (see the discussion on that issue in National
Director of Public Prosecutions v R O Cook Properties (Pty) Ltd
et al).22

[44] I have no doubt that Nicholson J fully appreciated
the implications of the Bill of Rights in that regard, and would have
ordered
the exclusion of Mrs Mazibuko’s interest had he considered
it possible to do so, and I do not think criticism of the learned
judge on that score is merited. I think it is apparent from his
judgment that he declined to make an exclusion order only because
he
considered himself unable to do so as a matter of law.

[45] The argument that was presented before him on
behalf of the NDPP, and repeated in this court, was that the
interests in the
property enjoyed respectively by Mr and Mrs Mazibuko
were not capable in law of separation. That being so, it was argued,
Mrs Mazibuko’s
interest in the property (more correctly, in the
rights of ownership in the property), which was not liable to
forfeiture, could
not in law be excised from the interest of Mr
Mazibuko, which was liable to forfeiture. Accepting that argument the
learned judge,
reluctantly, declined to make an exclusion order.

[46] I agree with the argument that was presented on
behalf of the NDPP (and accepted by the court below) so far as it
goes.

[47] Ordinary rights of co-ownership (sometimes called
‘free’ co-ownership) would be capable of being separated from one
another
because they are held separately by the co-owners. As
Professor CG Van der Merwe has expressed it (my translation):23

‘Although the property belongs to the co-owners communally, each
co-owner can dispose of his or her undivided share independently.
Because each co-owned share is viewed as separate property, each
co-owner may deal with his or her undivided share or a part thereof
without the co-operation of his associates, and even against their
will.’24

[48] But we are not concerned in this case with the
ordinary rights of co-owners. The appellants were married in
community of property
and the farm belonged to their joint estate.
The rights of spouses who are married in community of property –
sometimes called
‘tied’ co-ownership – are not divisible. As
King J expressed it in his thorough analysis of the nature of such
rights in
Ex parte Menzies et Uxor:25

‘[T]he co-ownership of their joint estate by spouses married in
community of property is a species of ‘tied’ co-ownership,
in
which the shares of the spouses are not only undivided but also
indivisible.’

He relied in reaching that conclusion on, amongst other
writers, Lee and Honoré Family, Things
and Succession,26
in which the authors describe that form of co-ownership as follows:

‘However, this co-ownership is not the normal Roman “free”
co-ownership (communio pro partibus indivisis) with freely
disposable shares and the possibility to demand a division at any
time, but can be described as “tied up” co-ownership
(“gebonde
mede-eindom”, the “Miteigentum zu gesamter Hand” of
German law)’.

[49] That being so it seems to me that an order that
purported to excise a portion of indivisible rights that were to vest
in the
curator bonis would have been a nonsense. One might ask how
the curator bonis would have been capable of alienating only part of
the indivisible rights of ownership while at the same time retaining
the balance. In that respect I think that the conclusion reached
by
Nicholson J was correct.

[50] But I do not think the matter ends there. While the
court below was not capable of ordering the exclusion of Mrs
Mazibuko’s
interest from the rights that would vest in the curator
bonis I agree with Bosielo AJA that it was capable of ordering a
division
of the proceeds once the property was sold. My difficulty
with the judgment of my colleague is that it does not dispose of the
argument raised by the NDPP and disclose what construction he places
on the section to yield that result. I do not think it is sufficient
merely to point to the fact that the argument of the NDPP would yield
a result that is constitutionally offensive and take the
matter no
further. If a proper construction of the section would yield an
unconstitutional result, that would mean that the section
is invalid.
The question that arises in this case is whether the section is
capable of a construction that avoids that result.

[51] Having found that the rights in the property itself
were not capable of separation in my view the learned judge might
have
gone a step further, though I do not fault the learned judge for
not having done so because that was not raised before him in
argument.

[52] I do not think that an exclusion order need be
confined to excluding the interest from the rights that vest in the
curator
bonis immediately upon a forfeiture order being made. The
section allows for the interest to be excluded from the ‘operation
of [the forfeiture order]’. As I see it a forfeiture order does not
operate only to vest the property in the state. It operates
as much
to trigger the authority that is conferred upon the curator bonis to
alienate the property, to require the curator bonis
to deposit the
proceeds to the Account, and to entitle the state to retain those
proceeds. I think that all those consequences
are capable of being
said to arise from the ‘operation of the [forfeiture order]’.

[53] It seems to me in those circumstances that it falls
within the power of a court to exclude the interest of a party from
any
stage of its operation and not only from the immediate effect of
the order, which is to vest the rights in the property in the curator
bonis. I think it might equally exclude the interest from the
operation of the order so far as the order operates to require the
curator bonis to deposit the proceeds to the Account.

[54] I think that Mrs Mazibuko has as much interest in
the proceeds of the property as she has in the property itself,
albeit that
the accrual of that interest might be contingent on its
sale, and I see no reason why that contingent interest does not fall
within
the wide definition of the term in the statute. Clearly the
proceeds of the sale are susceptible to separation. It seems to me in
the circumstances that Mrs Mazibuko’s contingent interest in the
proceeds of a sale is capable of being excluded from the operation
of
the order so far as the order operates to require the curator bonis
to deposit the proceeds to the Account. Indeed, s 57(1)
seems to me
to contemplate precisely that, in that it requires the curator bonis
to deposit the proceeds to the Account, but only
‘subject to any
order for the exclusion of interests … under s 52’.

[55] The decided cases on POCA have all been conscious
of the potential that the statute has to invade constitutionally
protected
rights – in this case the right against arbitrary
deprivation of property27
– and have been careful to avoid that occurring when construing the
meaning of its provisions. As this court said in Cook
Properties:

‘[The provisions of POCA] must be construed consistently with the
Constitution of the Republic of South Africa Act 108 of 1996.
The
Bill of Rights provides that “no law may permit arbitrary
deprivation of property”… The Constitutional Court has held
that
a deprivation of property is arbitrary when the statute in question
does not provide sufficient reason for the deprivation
or is
procedurally unfair. What ‘sufficient reason’ is may vary from
statute to statute… But the Court held that non-arbitrariness
at
any event requires a rational relationship between the deprivation
and the legislative ends sought to be attained through it:’(At
para
15).

I think that the section is at least capable of the
construction that I have given and it is a construction that we
should adopt
so as to avoid unconstitutionality.

[56] There remains one difficulty. While the joint
estate persists any moneys that are paid to Mrs Mazibuko will fall
into the joint
estate and accrue as much to her husband, who has
forfeited his interest in the property, as it will accrue to her. It
is well
recognised, however, that property is capable of being
excluded from a joint estate that arises from the community, as, for
example,
when property is bequeathed or donated on condition that it
is excluded.28
That being so I think it falls within the capacity of a court that
makes an exclusion order to order as well that the excluded
interest
is to accrue only to the spouse concerned, and to be excluded from
the joint estate.

[57] There are some further matters that arise from the
ancillary orders that were made. The court below ordered that the
curator
bonis who had been appointed earlier should continue in
office. The continuation in office of the curator bonis follows as a
matter
of law29
and I see no necessity for such an order. It also directed the
curator bonis to settle any outstanding balance on a mortgage bond
that was registered against the property before paying the proceeds
to the Account. The rights that vest in the curator bonis are
necessarily subject to other real rights in the property and will be
accounted for in the ordinary course upon transfer of the
property.
Once more I do not think that an order to that effect is necessary.
The court below also directed that the fees and expenditure
of the
curator bonis must be deducted from the proceeds of the property. I
do not think that order was competent. The incidence
of the costs and
expenses arising from a forfeiture order is regulated by s 57(5),
which requires those costs and expenses to be
defrayed from moneys
appropriated for that purpose by Parliament.

[58] There remains the question of costs. The costs of
the appeal are not capable of being divided as between Mr Mazibuko
(who has
failed) and Mrs Mazibuko (who has succeeded). In my view it
would be just in the circumstances to make no order in relation to
those costs. As for the costs in the court below they were
attributable almost solely to Mr Mazibuko’s failed attempt to
exclude
his interest and I see no reason to alter the order of the
court below (which has the effect that the costs will fall upon the
joint estate).

[59] The appeal by the first appellant fails. The appeal
by the second appellant succeeds. The order of the court below is
substituted
by the following orders:

2. Upon the disposal of the property as contemplated by
s 57(1) of the Act the curator bonis shall pay to the respondent
one
half of the net proceeds of the property. The said proceeds shall
be the separate property of the second respondent and excluded
from
the joint estate of the respondents.

3. The respondents are ordered to pay the costs.

___________________

R
W NUGENT

JUDGE
OF APPEAL

Appearances:

For
appellants: J Engelbrecht SC

Instructed
by:

Jasat
& Jasat Attorneys, Pietermaritzburg

c/o
Du Toit Louw Botha Inc, Bloemfontein

For
respondent: M
Govindasamy SC

A Naidoo

K Molelle

Instructed
by:

The State Attorney [Kwazulu-Natal], Durban

c/o
The State Attorney, Bloemfontein

1
S 38(2): ‘The High Court shall make an order referred to in
subsection (1) if there are reasonable grounds to believe that
the
property concerned-

(a) is an
instrumentality of an offence referred to in Schedule 1;

(b) is the
proceeds of unlawful activities; or

(c) is property
associated with terrorist and related activities’.

2
S 50(1): ‘The High Court shall, subject to
section 52, make an order applied for under section 48 (1) if the
Court finds on a balance
of probabilities that the property
concerned-

(a) is
an instrumentality of an offence referred to in Schedule 1’.

3
The judgment is reported as National Director of Public
Prosecutions v Mazibuko and Others 2008 (2) SACR 611 (N).

4S 52(2A): ‘The High
Court may make an order under subsection (1), in relation to the
forfeiture of an instrumentality of an
offence referred to in
Schedule 1 or property associated with terrorist and related
activities, if it finds on a balance of probabilities
that the
applicant for the order had acquired the interest concerned legally,
and –

(a) neither knew
nor had reasonable grounds to suspect that the property in which the
interest is held is an instrumentality of
an offence referred to in
Schedule 1 or property associated with terrorist and related
activities’.

5
S 1(3): ‘For the purposes of this Act a person ought reasonably to
have known or suspected a fact if the conclusions that he
or she
ought to have reached are those which would have been reached by a
reasonably diligent and viligant person having both-

(a) the general
knowledge, skill, training and experience that may reasonably be
expected of a person in his or her position;
and

(b) the general
knowledge, skill, training and experience that he or she in fact
has’.

14S 17(1)(a): ‘A spouse
married in community of property shall not without the written
consent of the other spouse institute legal
proceedings against
another person or defend legal proceedings instituted by other
person, except legal proceedings-

(a) in
respect of his separate property;

.
. . .’

S
18: ‘Notwithstanding the fact that a spouse is married in
community of property-

(a)
any amount recovered by him by way of damages, other than damages
for patrimonial loss, by reason of a delict committed against
him,
does not fall into the joint estate but becomes his separate
property;